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The two faces of worker specialization
Title / Series / Name
Labour Economics
Publication Volume
98
Publication Issue
Pages
Editors
Keywords
Displacement
Skills
Specialization
Economics and Econometrics
Organizational Behavior and Human Resource Management
Skills
Specialization
Economics and Econometrics
Organizational Behavior and Human Resource Management
Files
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Barany-Zsofia_2026.pdf
Adobe PDF, 1.9 MB
URI
https://hdl.handle.net/20.500.14018/28737
Abstract
We study how worker specialization — the distance between a worker’s skill set and those prevalent in the labor market — shapes employment outcomes. Using US and French data, we first document that specialized jobs are characterized by asymmetric skill profiles and a scarcity of nearby employment opportunities. We incorporate these features into a random search model with multidimensional skills, mismatch penalties and skill complementarity. We show that specialization lowers job-finding rates due to a lack of suitable jobs, but raises re-employment wages via improved productivity. Empirical evidence from displaced workers in both countries confirms these predictions. Our findings reconcile competing views in the literature by showing that specialization entails trade-offs and is neither uniformly beneficial nor harmful.
Topic
Publisher
Place of Publication
Type
Journal article
Date
2026-02
Language
ISBN
Identifiers
10.1016/j.labeco.2025.102829